HB-5887, As Passed Senate, December 1, 2010

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 5887

A bill to amend 1979 PA 94, entitled

"The state school aid act of 1979,"

by amending sections 11, 11d, 11m, 11p, 22a, 51a, and 56 (MCL

388.1611, 388.1611d, 388.1611m, 388.1611p, 388.1622a, 388.1651a,

and 388.1656), section 11 as amended by 2010 PA 204, sections 11d,

11m, 22a, 51a, and 56 as amended by 2010 PA 110, and section 11p as

added by 2010 PA 205, and by adding section 152a.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 11. (1) Subject to subsection (5), for the fiscal year

ending September 30, 2011, there is appropriated for the public

schools of this state and certain other state purposes relating to

education the sum of $10,937,260,500.00 from the state school aid

fund and the sum of $18,642,400.00 from the general fund. For the

fiscal year ending September 30, 2011, there is also appropriated

the remaining balance of the federal funding awarded to this state

under title XIV of the American recovery and reinvestment act of

2009, Public Law 111-5, estimated at $184,256,600.00, to be used

solely for the purpose of funding the primary funding formula

calculated under section 20, in accordance with federal law. In

addition, all other available federal funds, except those otherwise

appropriated under section 11p, are appropriated for the fiscal

year ending September 30, 2011.

(2) The appropriations under this section shall be allocated

as provided in this act. Money appropriated under this section from

the general fund shall be expended to fund the purposes of this act

before the expenditure of money appropriated under this section

from the state school aid fund. If the maximum amount appropriated

under this section from the state school aid fund for a fiscal year

exceeds the amount necessary to fully fund allocations under this

act from the state school aid fund, that excess amount shall not be

expended in that state fiscal year and shall not lapse to the

general fund, but instead shall be deposited into the school aid

stabilization fund created in section 11a. For 2009-2010 only, if

the department determines before bookclosing for the 2009-2010

state fiscal year that the maximum amount appropriated under this

section from the state school aid fund for 2009-2010 exceeds the

amount necessary to fully fund allocations under this act from the

state school aid fund for 2009-2010 and that state support for

elementary and secondary education for 2009-2010 will fall below

the level of support needed to comply with the maintenance of

effort provisions under title XIV of the American recovery and

reinvestment act of 2009, Public Law 111-5, then there is

appropriated for 2009-2010 from the school aid stabilization fund

an amount equal to $30,000,000.00 or the amount that the department

determines is necessary for the state support for elementary and

secondary education to meet the level of support needed to comply

with the maintenance of effort provisions under title XIV of the

American recovery and reinvestment act of 2009, Public Law 111-5,

whichever is greater. The department shall use any funds

appropriated under this subsection as follows:

(a) First, to allocate $10,000,000.00 to provide funding to

each intermediate district in an amount equal to the product of

14.75% multiplied by the amount of funding allocated to that

intermediate district under section 81 for 2009-2010 under 2010 PA

110.

(b) Second, to allocate the amount necessary, estimated at

$10,000,000.00, to provide funding under this subdivision to

districts for which the amount of per-pupil funding calculated and

allocated under section 11p(2) is less than $154.00. The payment to

a district under this subdivision is an amount equal to the

difference between $154.00 and the per-pupil funding amount

calculated and allocated under section 11p(2) for the district,

multiplied by the district's 2010-2011 membership used for the

October 2010 payment.

amount of the per-pupil reduction under section 11d(1) for 2009-

2010.

(3) If the maximum amount appropriated under this section from

the state school aid fund and the school aid stabilization fund for

a fiscal year exceeds the amount available for expenditure from the

state school aid fund for that fiscal year, payments under sections

11f, 11g, 11j, 22a, 26a, 26b, 31d, 31f, 51a(2), 51a(12), 51c, 53a,

~~and~~ 56, and 152a shall be made in full. In addition, for districts

beginning operations after 1994-95 that qualify for payments under

section 22b, payments under section 22b shall be made so that the

qualifying districts receive the lesser of an amount equal to the

1994-95 foundation allowance of the district in which the district

beginning operations after 1994-95 is located or $5,500.00. The

amount of the payment to be made under section 22b for these

qualifying districts shall be as calculated under section 22a, with

the balance of the payment under section 22b being subject to the

proration otherwise provided under this subsection and subsection

(4). If proration is necessary, state payments under each of the

other sections of this act from all state funding sources shall be

prorated in the manner prescribed in subsection (4) as necessary to

reflect the amount available for expenditure from the state school

aid fund for the affected fiscal year. However, if the department

of treasury determines that proration will be required under this

subsection, or if the department of treasury determines that

further proration is required under this subsection after an

initial proration has already been made for a fiscal year, the

department of treasury shall notify the state budget director, and

the state budget director shall notify the legislature at least 30

calendar days or 6 legislative session days, whichever is more,

before the department reduces any payments under this act because

of the proration. During the 30 calendar day or 6 legislative

session day period after that notification by the state budget

director, the department shall not reduce any payments under this

act because of proration under this subsection. The legislature may

prevent proration from occurring by, within the 30 calendar day or

6 legislative session day period after that notification by the

state budget director, enacting legislation appropriating

additional funds from the general fund, countercyclical budget and

economic stabilization fund, state school aid fund balance, or

another source to fund the amount of the projected shortfall.

(4) If proration is necessary under subsection (3), the

department shall calculate the proration in district and

intermediate district payments that is required under subsection

(3) as follows:

(a) The department shall calculate the percentage of total

state school aid allocated under this act for the affected fiscal

year for each of the following:

(i) Districts.

(ii) Intermediate districts.

(iii) Entities other than districts or intermediate districts.

(b) The department shall recover a percentage of the proration

amount required under subsection (3) that is equal to the

percentage calculated under subdivision (a)(i) for districts by

reducing payments to districts. This reduction shall be made by

calculating an equal dollar amount per pupil as necessary to

recover this percentage of the proration amount and reducing each

district's total state school aid from state sources, other than

payments under sections 11f, 11g, 11j, 22a, 26a, 26b, 31d, 31f,

51a(2), 51a(12), 51c, ~~and~~ 53a, and 152a, by that amount.

amount required under subsection (3) that is equal to the

percentage calculated under subdivision (a)(ii) for intermediate

districts by reducing payments to intermediate districts. This

reduction shall be made by reducing the payments to each

intermediate district, other than payments under sections 11f, 11g,

26a, 26b, 51a(2), 51a(12), 53a, ~~and~~ 56, and 152a, on an equal

percentage basis.

(d) The department shall recover a percentage of the proration

amount required under subsection (3) that is equal to the

percentage calculated under subdivision (a)(iii) for entities other

than districts and intermediate districts by reducing payments to

these entities. This reduction shall be made by reducing the

payments to each of these entities, other than payments under

sections 11j, 26a, and 26b, on an equal percentage basis.

(5) Any general fund allocations under this act that are not

expended by the end of the state fiscal year are transferred to the

school aid stabilization fund created under section 11a.

Sec. 11d. (1) For 2009-2010 only, the department shall deduct

an amount equal to $154.00 per membership pupil from the total

state school aid otherwise allocated under this act to each

district, except for money allocated under sections 11g, 22a, 31d,

51a(12), 51c, and 53a. For 2010-2011, the department shall deduct

an amount equal to ~~$154.00~~ $170.00 per membership pupil from the

total state school aid otherwise allocated under this act to each

district, except for money allocated under sections 11g, 22a, 31d,

32d, 51a(12), 51c, ~~and~~ 53a, and 152a. If a district complies with

subsection (2), a district may choose to apply this reduction to

funding the district receives under any provision of this act,

other than sections 11g, 22a, 31d, 51a(12), 51c, ~~and~~ 53a, and,

beginning in 2010-2011, ~~section 32d,~~ sections 32d and 152a, even if

the reduction chosen by the district results in a program being

reduced or discontinued. If a district does not comply with

subsection (2), the district shall apply this reduction to

available funding under section 22b first, up to the total amount

of the reduction, before reducing other funding the district

receives under this act, other than sections 11g, 22a, 31d,

51a(12), 51c, ~~and~~ 53a, and 152a.

(2) Not later than February 1, 2010, a district shall enter

into an agreement with the department to develop a service

consolidation plan to reduce school operating costs that is in

compliance with department guidelines. The department guidelines

may identify, but are not limited to, allowable cost-sharing

arrangements for the provision of business services and

instructional services and the creation of joint operating

agreements between and among districts and intermediate districts.

The department shall establish guidelines for service consolidation

plans under this subsection not later than 60 days after the

effective date of this section.

(3) Not later than February 1, 2011, a district shall submit

to the department, in the form and manner prescribed by the

department, a report on the status of the district's implementation

of the service consolidation plan the district submitted under

subsection (2).

(4) In addition to developing a service consolidation plan

under subsection (2), a district or intermediate district that

purchases diesel fuel shall explore possibilities for coordinating

regional purchasing of diesel fuel.

Sec. 11m. From the appropriations in section 11, there is

allocated for 2009-2010 an amount not to exceed ~~$20,000,000.00~~

$12,000,000.00 and for 2010-2011 there is allocated an amount not

to exceed $45,000,000.00 for fiscal year cash-flow borrowing costs

solely related to the state school aid fund established by section

11 of article IX of the state constitution of 1963.

Sec. 11p. (1) In addition to the funds appropriated under

section 11, for 2010-2011 only, there is appropriated the amount of

the federal funding awarded to this state under section 101 of

title I of Public Law 111-226, estimated at ~~$316,270,300.00,~~

$316,270,300.00, solely for the purposes identified in that section

of federal law, to be distributed by funding those portions of the

primary funding formulae that are calculated and allocated under

this section.

(2) ~~(3)~~ From the federal funding appropriated under subsection

(1), there is allocated an amount not to exceed ~~$65,770,300.00~~

$311,770,300.00 to provide to each district or public school

academy for 2010-2011 only a 1-time portion of per-pupil funding to

be allocated under this subsection. The department shall calculate

and allocate the 1-time portion of per-pupil funding allocated to

each district or public school academy under this subsection as

follows:

(a) First, for each district or public school academy,

calculate the amount that the district's foundation allowance or

public school academy's per pupil allocation calculated under

section 20 would be if the basic foundation allowance for 2010-2011

were ~~$8,512.00,~~ $8,600.00 if the maximum public school academy

allocation for 2010-2011 were ~~$7,623.00,~~ $7,787.00 and if the

$20.00 amount in section 20(3)(a) and 20(26)(h) were instead

~~$8.00.~~$35.00.

(b) Second, calculate the difference between the amount

calculated for the district or public school academy under

subdivision (a) and the amount of the district's foundation

allowance or public school academy's per pupil allocation as

actually calculated under section 20 for 2010-2011.

(b) times the district's or public school academy's 2010-2011

membership used for the October 2010 payment under this act.

(3) ~~(4)~~ For 2010-2011 only, from the federal funding

appropriated under subsection (1), there is allocated an amount not

to exceed $4,500,000.00 to provide a 1-time allocation of primary

funding to each intermediate district in an amount equal to the

product of 6.9% multiplied by the amount of funding allocated to

that intermediate district under section 81 for 2010-2011 under

2010 PA 110.

(4) ~~(5)~~ If there is money remaining under this section after

the allocations under subsections (2) ~~, (3), and (4)~~ and (3) and

after any amount that is unused under those subsections because a

district or public school academy is unable to use its full

allocation under ~~subsections (2) and (3),~~ subsection (2), then in

addition to the amounts allocated under ~~subsections (2) and (3)~~

subsection (2) there is also allocated to each district and public

school academy that received money under subsection ~~(3)~~ (2) an

amount equal to the district's or public school academy's relative

proportion of the funding actually used under subsection ~~(3)~~ (2)

applied to that remaining money, calculated and distributed in a

form and manner determined by the department.

(5) ~~(6)~~ To be eligible to receive funds appropriated under

this section, a district, intermediate district, or public school

academy must meet 1 of the following:

(a) Has previously submitted an application to receive funding

under the state fiscal stabilization fund as provided for under

title XIV of the American recovery and reinvestment act of 2009,

Public Law 111-5.

(b) Submits an application for the funding under this section

in a form and manner determined by the department.

(6) ~~(7)~~ A recipient of funding under this section shall comply

with all reporting requirements of section 1512 of the American

recovery and reinvestment act of 2009, Public Law 111-5, and other

reporting requirements established by the United States department

of education for this funding.

Sec. 22a. (1) From the appropriation in section 11, there is

allocated an amount not to exceed ~~$5,785,000,000.00~~

$5,796,241,000.00 for 2009-2010 and an amount not to exceed

$5,764,000,000.00 for 2010-2011 for payments to districts,

qualifying university schools, and qualifying public school

academies to guarantee each district, qualifying university school,

and qualifying public school academy an amount equal to its 1994-95

total state and local per pupil revenue for school operating

purposes under section 11 of article IX of the state constitution

of 1963. Pursuant to section 11 of article IX of the state

constitution of 1963, this guarantee does not apply to a district

in a year in which the district levies a millage rate for school

district operating purposes less than it levied in 1994. However,

subsection (2) applies to calculating the payments under this

section. Funds allocated under this section that are not expended

in the state fiscal year for which they were allocated, as

determined by the department, may be used to supplement the

allocations under sections 22b and 51c in order to fully fund those

calculated allocations for the same fiscal year.

(2) To ensure that a district receives an amount equal to the

district's 1994-95 total state and local per pupil revenue for

school operating purposes, there is allocated to each district a

state portion of the district's 1994-95 foundation allowance in an

amount calculated as follows:

(a) Except as otherwise provided in this subsection, the state

portion of a district's 1994-95 foundation allowance is an amount

equal to the district's 1994-95 foundation allowance or $6,500.00,

whichever is less, minus the difference between the sum of the

product of the taxable value per membership pupil of all property

in the district that is nonexempt property times the district's

certified mills and, for a district with certified mills exceeding

12, the product of the taxable value per membership pupil of

property in the district that is commercial personal property times

the certified mills minus 12 mills and the quotient of the ad

valorem property tax revenue of the district captured under tax

increment financing acts divided by the district's membership. For

a district that has a millage reduction required under section 31

of article IX of the state constitution of 1963, the state portion

of the district's foundation allowance shall be calculated as if

that reduction did not occur.

(b) For a district that had a 1994-95 foundation allowance

greater than $6,500.00, the state payment under this subsection

shall be the sum of the amount calculated under subdivision (a)

plus the amount calculated under this subdivision. The amount

calculated under this subdivision shall be equal to the difference

between the district's 1994-95 foundation allowance minus $6,500.00

and the current year hold harmless school operating taxes per

pupil. If the result of the calculation under subdivision (a) is

negative, the negative amount shall be an offset against any state

payment calculated under this subdivision. If the result of a

calculation under this subdivision is negative, there shall not be

a state payment or a deduction under this subdivision. The taxable

values per membership pupil used in the calculations under this

subdivision are as adjusted by ad valorem property tax revenue

captured under tax increment financing acts divided by the

district's membership.

(3) Beginning in 2003-2004, for pupils in membership in a

qualifying public school academy or qualifying university school,

there is allocated under this section to the authorizing body that

is the fiscal agent for the qualifying public school academy for

forwarding to the qualifying public school academy, or to the board

of the public university operating the qualifying university

school, an amount equal to the 1994-95 per pupil payment to the

qualifying public school academy or qualifying university school

under section 20.

(4) A district, qualifying university school, or qualifying

public school academy may use funds allocated under this section in

conjunction with any federal funds for which the district,

qualifying university school, or qualifying public school academy

otherwise would be eligible.

(5) For a district that is formed or reconfigured after June

1, 2000 by consolidation of 2 or more districts or by annexation,

the resulting district's 1994-95 foundation allowance under this

section beginning after the effective date of the consolidation or

annexation shall be the average of the 1994-95 foundation

allowances of each of the original or affected districts,

calculated as provided in this section, weighted as to the

percentage of pupils in total membership in the resulting district

in the state fiscal year in which the consolidation takes place who

reside in the geographic area of each of the original districts. If

an affected district's 1994-95 foundation allowance is less than

the 1994-95 basic foundation allowance, the amount of that

district's 1994-95 foundation allowance shall be considered for the

purpose of calculations under this subsection to be equal to the

amount of the 1994-95 basic foundation allowance.

(6) As used in this section:

(a) "1994-95 foundation allowance" means a district's 1994-95

foundation allowance calculated and certified by the department of

treasury or the superintendent under former section 20a as enacted

in 1993 PA 336 and as amended by 1994 PA 283.

(b) "Certified mills" means the lesser of 18 mills or the

number of mills of school operating taxes levied by the district in

1993-94.

for which a particular calculation is made.

(d) "Current year hold harmless school operating taxes per

pupil" means the per pupil revenue generated by multiplying a

district's 1994-95 hold harmless millage by the district's current

year taxable value per membership pupil.

(e) "Hold harmless millage" means, for a district with a 1994-

95 foundation allowance greater than $6,500.00, the number of mills

by which the exemption from the levy of school operating taxes on a

homestead, qualified agricultural property, qualified forest

property, supportive housing property, industrial personal

property, and commercial personal property could be reduced as

provided in section 1211 of the revised school code, MCL 380.1211,

and the number of mills of school operating taxes that could be

levied on all property as provided in section 1211(2) of the

revised school code, MCL 380.1211, as certified by the department

of treasury for the 1994 tax year.

(f) "Homestead", "qualified agricultural property", "qualified

forest property", "supportive housing property", "industrial

personal property", and "commercial personal property" mean those

terms as defined in section 1211 of the revised school code, MCL

380.1211.

(g) "Membership" means the definition of that term under

section 6 as in effect for the particular fiscal year for which a

particular calculation is made.

(h) "Nonexempt property" means property that is not a

principal residence, qualified agricultural property, qualified

forest property, supportive housing property, industrial personal

property, or commercial personal property.

(i) "Qualifying public school academy" means a public school

academy that was in operation in the 1994-95 school year and is in

operation in the current state fiscal year.

(j) "Qualifying university school" means a university school

that was in operation in the 1994-95 school year and is in

operation in the current fiscal year.

(k) "School operating taxes" means local ad valorem property

taxes levied under section 1211 of the revised school code, MCL

380.1211, and retained for school operating purposes.

(l) "Tax increment financing acts" means 1975 PA 197, MCL

125.1651 to 125.1681, the tax increment finance authority act, 1980

PA 450, MCL 125.1801 to 125.1830, the local development financing

act, 1986 PA 281, MCL 125.2151 to 125.2174, the brownfield

redevelopment financing act, 1996 PA 381, MCL 125.2651 to 125.2672,

or the corridor improvement authority act, 2005 PA 280, MCL

125.2871 to 125.2899.

(m) "Taxable value per membership pupil" means each of the

following divided by the district's membership:

(i) For the number of mills by which the exemption from the

levy of school operating taxes on a homestead, qualified

agricultural property, qualified forest property, supportive

housing property, industrial personal property, and commercial

personal property may be reduced as provided in section 1211 of the

revised school code, MCL 380.1211, the taxable value of homestead,

qualified agricultural property, qualified forest property,

supportive housing property, industrial personal property, and

commercial personal property for the calendar year ending in the

current state fiscal year.

(ii) For the number of mills of school operating taxes that may

be levied on all property as provided in section 1211(2) of the

revised school code, MCL 380.1211, the taxable value of all

property for the calendar year ending in the current state fiscal

year.

Sec. 51a. (1) From the appropriation in section 11, there is

allocated for 2009-2010 an amount not to exceed ~~$1,019,583,000.00~~

$1,016,342,000.00 and there is allocated for 2010-2011 an amount

not to exceed $1,057,883,000.00 from state sources and all

available federal funding under sections 611 to 619 of part B of

the individuals with disabilities education act, 20 USC 1411 to

1419, estimated at $350,700,000.00 for 2009-2010 and estimated at

$385,700,000.00 for 2010-2011, plus any carryover federal funds

from previous year appropriations. The allocations under this

subsection are for the purpose of reimbursing districts and

intermediate districts for special education programs, services,

and special education personnel as prescribed in article 3 of the

revised school code, MCL 380.1701 to 380.1766; net tuition payments

made by intermediate districts to the Michigan schools for the deaf

and blind; and special education programs and services for pupils

who are eligible for special education programs and services

according to statute or rule. For meeting the costs of special

education programs and services not reimbursed under this article,

a district or intermediate district may use money in general funds

or special education funds, not otherwise restricted, or

contributions from districts to intermediate districts, tuition

payments, gifts and contributions from individuals, or federal

funds that may be available for this purpose, as determined by the

intermediate district plan prepared pursuant to article 3 of the

revised school code, MCL 380.1701 to 380.1766. All federal funds

allocated under this section in excess of those allocated under

this section for 2002-2003 may be distributed in accordance with

the flexible funding provisions of the individuals with

disabilities education act, Public Law 108-446, including, but not

limited to, 34 CFR 300.206 and 300.208. Notwithstanding section

17b, payments of federal funds to districts, intermediate

districts, and other eligible entities under this section shall be

paid on a schedule determined by the department.

(2) From the funds allocated under subsection (1), there is

allocated each fiscal year the amount necessary, estimated at

~~$238,500,000.00~~ $234,780,000.00 for 2009-2010 and estimated at

$248,200,000.00 for 2010-2011, for payments toward reimbursing

districts and intermediate districts for 28.6138% of total approved

costs of special education, excluding costs reimbursed under

section 53a, and 70.4165% of total approved costs of special

education transportation. Allocations under this subsection shall

be made as follows:

(a) The initial amount allocated to a district under this

subsection toward fulfilling the specified percentages shall be

calculated by multiplying the district's special education pupil

membership, excluding pupils described in subsection (12), times

the sum of the foundation allowance under section 20 of the pupil's

district of residence plus the amount of the district's per pupil

allocation under section 20j(2), not to exceed the basic foundation

allowance under section 20 for the current fiscal year, or, for a

special education pupil in membership in a district that is a

public school academy or university school, times an amount equal

to the amount per membership pupil calculated under section 20(6).

For an intermediate district, the amount allocated under this

subdivision toward fulfilling the specified percentages shall be an

amount per special education membership pupil, excluding pupils

described in subsection (12), and shall be calculated in the same

manner as for a district, using the foundation allowance under

section 20 of the pupil's district of residence, not to exceed the

basic foundation allowance under section 20 for the current fiscal

year, and that district's per pupil allocation under section

20j(2).

(b) After the allocations under subdivision (a), districts and

intermediate districts for which the payments calculated under

subdivision (a) do not fulfill the specified percentages shall be

paid the amount necessary to achieve the specified percentages for

the district or intermediate district.

(3) From the funds allocated under subsection (1), there is

allocated each fiscal year for 2009-2010 and for 2010-2011 the

amount necessary, estimated at ~~$1,200,000.00~~ $1,329,000.00 for

2009-2010 and estimated at $1,400,000.00 for 2010-2011, to make

payments to districts and intermediate districts under this

subsection. If the amount allocated to a district or intermediate

district for a fiscal year under subsection (2)(b) is less than the

sum of the amounts allocated to the district or intermediate

district for 1996-97 under sections 52 and 58, there is allocated

to the district or intermediate district for the fiscal year an

amount equal to that difference, adjusted by applying the same

proration factor that was used in the distribution of funds under

section 52 in 1996-97 as adjusted to the district's or intermediate

district's necessary costs of special education used in

calculations for the fiscal year. This adjustment is to reflect

reductions in special education program operations or services

between 1996-97 and subsequent fiscal years. Adjustments for

reductions in special education program operations or services

shall be made in a manner determined by the department and shall

include adjustments for program or service shifts.

(4) If the department determines that the sum of the amounts

allocated for a fiscal year to a district or intermediate district

under subsection (2)(a) and (b) is not sufficient to fulfill the

specified percentages in subsection (2), then the shortfall shall

be paid to the district or intermediate district during the fiscal

year beginning on the October 1 following the determination and

payments under subsection (3) shall be adjusted as necessary. If

the department determines that the sum of the amounts allocated for

a fiscal year to a district or intermediate district under

subsection (2)(a) and (b) exceeds the sum of the amount necessary

to fulfill the specified percentages in subsection (2), then the

department shall deduct the amount of the excess from the

district's or intermediate district's payments under this act for

the fiscal year beginning on the October 1 following the

determination and payments under subsection (3) shall be adjusted

as necessary. However, if the amount allocated under subsection

(2)(a) in itself exceeds the amount necessary to fulfill the

specified percentages in subsection (2), there shall be no

deduction under this subsection.

(5) State funds shall be allocated on a total approved cost

basis. Federal funds shall be allocated under applicable federal

requirements, except that an amount not to exceed $3,500,000.00 may

be allocated by the department each fiscal year for 2009-2010 and

for 2010-2011 to districts, intermediate districts, or other

eligible entities on a competitive grant basis for programs,

equipment, and services that the department determines to be

designed to benefit or improve special education on a statewide

scale.

(6) From the amount allocated in subsection (1), there is

allocated ~~each fiscal year~~ an amount not to exceed ~~$2,200,000.00~~

$1,750,000.00 for 2009-2010 and an amount not to exceed

$2,200,000.00 for 2010-2011 to reimburse 100% of the net increase

in necessary costs incurred by a district or intermediate district

in implementing the revisions in the administrative rules for

special education that became effective on July 1, 1987. As used in

this subsection, "net increase in necessary costs" means the

necessary additional costs incurred solely because of new or

revised requirements in the administrative rules minus cost savings

permitted in implementing the revised rules. Net increase in

necessary costs shall be determined in a manner specified by the

department.

(7) For purposes of this article, all of the following apply:

(a) "Total approved costs of special education" shall be

determined in a manner specified by the department and may include

indirect costs, but shall not exceed 115% of approved direct costs

for section 52 and section 53a programs. The total approved costs

include salary and other compensation for all approved special

education personnel for the program, including payments for social

security and medicare and public school employee retirement system

contributions. The total approved costs do not include salaries or

other compensation paid to administrative personnel who are not

special education personnel as defined in section 6 of the revised

school code, MCL 380.6. Costs reimbursed by federal funds, other

than those federal funds included in the allocation made under this

article, are not included. Special education approved personnel not

utilized full time in the evaluation of students or in the delivery

of special education programs, ancillary, and other related

services shall be reimbursed under this section only for that

portion of time actually spent providing these programs and

services, with the exception of special education programs and

services provided to youth placed in child caring institutions or

juvenile detention programs approved by the department to provide

an on-grounds education program.

(b) Beginning with the 2004-2005 fiscal year, a district or

intermediate district that employed special education support

services staff to provide special education support services in

2003-2004 or in a subsequent fiscal year and that in a fiscal year

after 2003-2004 receives the same type of support services from

another district or intermediate district shall report the cost of

those support services for special education reimbursement purposes

under this act. This subdivision does not prohibit the transfer of

special education classroom teachers and special education

classroom aides if the pupils counted in membership associated with

those special education classroom teachers and special education

classroom aides are transferred and counted in membership in the

other district or intermediate district in conjunction with the

transfer of those teachers and aides.

fiscal year that the amounts allocated for that fiscal year under

subsections (2), (3), (6), (8), and (12) and sections 53a, 54, and

56 will exceed expenditures for that fiscal year under subsections

(2), (3), (6), (8), and (12) and sections 53a, 54, and 56, then for

a district or intermediate district whose reimbursement for that

fiscal year would otherwise be affected by subdivision (b),

subdivision (b) does not apply to the calculation of the

reimbursement for that district or intermediate district and

reimbursement for that district or intermediate district shall be

calculated in the same manner as it was for 2003-2004. If the

amount of the excess allocations under subsections (2), (3), (6),

(8), and (12) and sections 53a, 54, and 56 is not sufficient to

fully fund the calculation of reimbursement to those districts and

intermediate districts under this subdivision, then the

calculations and resulting reimbursement under this subdivision

shall be prorated on an equal percentage basis.

(d) Reimbursement for ancillary and other related services, as

defined by R 340.1701c of the Michigan administrative code, shall

not be provided when those services are covered by and available

through private group health insurance carriers or federal

reimbursed program sources unless the department and district or

intermediate district agree otherwise and that agreement is

approved by the state budget director. Expenses, other than the

incidental expense of filing, shall not be borne by the parent. In

addition, the filing of claims shall not delay the education of a

pupil. A district or intermediate district shall be responsible for

payment of a deductible amount and for an advance payment required

until the time a claim is paid.

(e) Beginning with calculations for 2004-2005, if an

intermediate district purchases a special education pupil

transportation service from a constituent district that was

previously purchased from a private entity; if the purchase from

the constituent district is at a lower cost, adjusted for changes

in fuel costs; and if the cost shift from the intermediate district

to the constituent does not result in any net change in the revenue

the constituent district receives from payments under sections 22b

and 51c, then upon application by the intermediate district, the

department shall direct the intermediate district to continue to

report the cost associated with the specific identified special

education pupil transportation service and shall adjust the costs

reported by the constituent district to remove the cost associated

with that specific service.

(8) From the allocation in subsection (1), there is allocated

each fiscal year for 2009-2010 and for 2010-2011 an amount not to

exceed $15,313,900.00 to intermediate districts. The payment under

this subsection to each intermediate district shall be equal to the

amount of the 1996-97 allocation to the intermediate district under

subsection (6) of this section as in effect for 1996-97.

(9) A pupil who is enrolled in a full-time special education

program conducted or administered by an intermediate district or a

pupil who is enrolled in the Michigan schools for the deaf and

blind shall not be included in the membership count of a district,

but shall be counted in membership in the intermediate district of

residence.

(10) Special education personnel transferred from 1 district

to another to implement the revised school code shall be entitled

to the rights, benefits, and tenure to which the person would

otherwise be entitled had that person been employed by the

receiving district originally.

(11) If a district or intermediate district uses money

received under this section for a purpose other than the purpose or

purposes for which the money is allocated, the department may

require the district or intermediate district to refund the amount

of money received. Money that is refunded shall be deposited in the

state treasury to the credit of the state school aid fund.

(12) From the funds allocated in subsection (1), there is

allocated each fiscal year the amount necessary, estimated at

~~$7,800,000.00~~ $6,200,000.00 for 2009-2010 and estimated at

$6,600,000.00 for 2010-2011, to pay the foundation allowances for

pupils described in this subsection. The allocation to a district

under this subsection shall be calculated by multiplying the number

of pupils described in this subsection who are counted in

membership in the district times the sum of the foundation

allowance under section 20 of the pupil's district of residence

plus the amount of the district's per pupil allocation under

section 20j(2), not to exceed the basic foundation allowance under

section 20 for the current fiscal year, or, for a pupil described

in this subsection who is counted in membership in a district that

is a public school academy or university school, times an amount

equal to the amount per membership pupil under section 20(6). The

allocation to an intermediate district under this subsection shall

be calculated in the same manner as for a district, using the

foundation allowance under section 20 of the pupil's district of

residence, not to exceed the basic foundation allowance under

section 20 for the current fiscal year, and that district's per

pupil allocation under section 20j(2). This subsection applies to

all of the following pupils:

(a) Pupils described in section 53a.

(b) Pupils counted in membership in an intermediate district

who are not special education pupils and are served by the

intermediate district in a juvenile detention or child caring

facility.

intermediate district and provided educational services by the

department of community health.

(13) If it is determined that funds allocated under subsection

(2) or (12) or under section 51c will not be expended, funds up to

the amount necessary and available may be used to supplement the

allocations under subsection (2) or (12) or under section 51c in

order to fully fund those allocations. After payments under

subsections (2) and (12) and section 51c, the remaining

expenditures from the allocation in subsection (1) shall be made in

the following order:

(a) 100% of the reimbursement required under section 53a.

(b) 100% of the reimbursement required under subsection (6).

(d) 100% of the payment required under subsection (3).

(e) 100% of the payment required under subsection (8).

(f) 100% of the payments under section 56.

(14) The allocations under subsections (2), (3), and (12)

shall be allocations to intermediate districts only and shall not

be allocations to districts, but instead shall be calculations used

only to determine the state payments under section 22b.

(15) If a public school academy enrolls pursuant to this

section a pupil who resides outside of the intermediate district in

which the public school academy is located and who is eligible for

special education programs and services according to statute or

rule, or who is a child with disabilities, as defined under the

individuals with disabilities education act, Public Law 108-446,

the provision of special education programs and services and the

payment of the added costs of special education programs and

services for the pupil are the responsibility of the district and

intermediate district in which the pupil resides unless the

enrolling district or intermediate district has a written agreement

with the district or intermediate district in which the pupil

resides or the public school academy for the purpose of providing

the pupil with a free appropriate public education and the written

agreement includes at least an agreement on the responsibility for

the payment of the added costs of special education programs and

services for the pupil.

Sec. 56. (1) For the purposes of this section:

(a) "Membership" means for a particular fiscal year the total

membership for the immediately preceding fiscal year of the

intermediate district and the districts constituent to the

intermediate district.

(b) "Millage levied" means the millage levied for special

education pursuant to part 30 of the revised school code, MCL

380.1711 to 380.1743, including a levy for debt service

obligations.

districts constituent to an intermediate district, except that if a

district has elected not to come under part 30 of the revised

school code, MCL 380.1711 to 380.1743, membership and taxable value

of the district shall not be included in the membership and taxable

value of the intermediate district.

(2) From the allocation under section 51a(1), there is

allocated an amount not to exceed ~~$36,881,100.00 each fiscal year~~

$39,281,100.00 for 2009-2010 and an amount not to exceed

$36,881,100.00 for 2010-2011 to reimburse intermediate districts

levying millages for special education pursuant to part 30 of the

revised school code, MCL 380.1711 to 380.1743. The purpose, use,

and expenditure of the reimbursement shall be limited as if the

funds were generated by these millages and governed by the

intermediate district plan adopted pursuant to article 3 of the

revised school code, MCL 380.1701 to 380.1766. As a condition of

receiving funds under this section, an intermediate district

distributing any portion of special education millage funds to its

constituent districts shall submit for departmental approval and

implement a distribution plan.

(3) Reimbursement for those millages levied in 2008-2009 shall

be made in 2009-2010 at an amount per 2008-2009 membership pupil

computed by subtracting from $180,600.00 the 2008-2009 taxable

value behind each membership pupil and multiplying the resulting

difference by the 2008-2009 millage levied. Reimbursement for those

millages levied in 2009-2010 shall be made in 2010-2011 at an

amount per 2009-2010 membership pupil computed by subtracting from

$181,700.00 the 2009-2010 taxable value behind each membership

pupil and multiplying the resulting difference by the 2009-2010

millage levied.

Sec. 152a. (1) As required by the court in the consolidated

cases known as Adair v State of Michigan, Michigan supreme court

docket nos. 137424 and 137453, from the state school aid fund money

appropriated in section 11 there is allocated for 2010-2011 an

amount not to exceed $25,624,500.00 to be used solely for the

purpose of paying necessary costs related to the state-mandated

collection, maintenance, and reporting of data to this state.

(2) From the allocation in subsection (1), the department

shall make payments to districts and intermediate districts in an

equal amount per pupil based on the total number of pupils in

membership in each district and intermediate district. The

department shall not make any adjustment to these payments after

the final installment payment under section 17b is made.

Enacting section 1. (1) In accordance with section 30 of

article IX of the state constitution of 1963, total state spending

in this amendatory act, in 2010 PA 204, and in 2010 PA 110 from

state sources for fiscal year 2010-2011 is estimated at

$10,955,902,900.00 and state appropriations to be paid to local

units of government for fiscal year 2010-2011 are estimated at

$10,824,041,900.00.

(2) In accordance with section 30 of article IX of the state

constitution of 1963, total state spending in this amendatory act,

in 2010 PA 110, and in 2009 PA 121 from state sources for fiscal

year 2009-2010 is estimated at $10,645,097,700.00 and state

appropriations to be paid to local units of government for fiscal